VIJAYAWADA: Dead rent, which is the minimum guaranteed amount of royalty per year payable as per rules or agreement under a mining lease, has to be paid, irrespective of whether the mining is done or not, the Andhra Pradesh High Court ruled recently.
Striking off the petition filed by Mangaluru Minerals Private Limited seeking court intervention as officials brought pressure on it to pay the dead rent even when the mining was not done for want of clearances, Justice R Raghunandan Rao said not getting clearances is not a ground for non-payment of dead rent for the non-mining period after getting the lease.
In 2003, Mangaluru Minerals based in Karnataka took a lease of 260 acres of land at Siddavaram village in Kota Mandal in the erstwhile Nellore district to mine silica sand. The lease period is 20 years. On receiving a notice that environmental clearances need to be obtained to mine minor minerals, the company discontinued mining from 2006. It continued to pay dead rent till 2017-18.
Thereafter, it stopped paying the dead rent. Following it, the Mines and Geology officials asked the company to pay the dead rent. The company approached the High Court seeking its intervention in the matter. The petitioner’s counsel argued that the company has no need for paying the dead rent since it stopped mining after not getting the environmental clearance.
However, the government pleader contended that the government at no point of time had asked the company to stop mining. All it asked was to submit the environmental clearance and the stoppage of mining was the company’s own decision.
After hearing the arguments from both sides, the Judge said it was the company which voluntarily discontinued mining misinterpreting the notification issued for environmental impact assessment. “The company is responsible for obtaining all needed clearances for mining and stopping the mining pending clearance is not the ground for not paying the dead rent,” the HC observed.